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KG Eco Solution · 151860 · Autos

KG Eco Solution: Thin Margins and Low Multiples, With a Wide Gap to the Model Estimate

Why this report

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KG Eco Solution trades at ₩4,930 per share, near the low end of its 52-week range of ₩4,745 to ₩7,600, with a P/E of 1.9 and a P/B of 0.2. Revenue is large relative to the company's market value of ₩234.7B, but operating margins are low and free cash flow is negative.

Written Oct 30, 2026 · Data as of Oct 29, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a picture of a company priced far below its book value and its peers on earnings. The P/B of 0.2 compares with 0.3 to 0.7 for the listed peers, and the P/E of 1.9 is below the peers that report one (3.3 to 7.3). Trailing net income of ₩126.6B against a market value of ₩234.7B explains the low P/E.

The data does not show why the market applies such a discount. Operating margin has fallen from 9.2% in 2021 to 1.9% over the latest twelve months, free cash flow is negative at ₩166.3B, and borrowings of ₩586.9B exceed cash of ₩294.1B. The recent filings show a busy capital-structure period, including exchangeable and convertible bond decisions, a treasury share sale, a share cancellation and a value-up plan. The data gives no details on the terms of these.

Business overview

KG Eco Solution is listed on KOSDAQ and classified in the data under Autos. It was founded in 1999 and listed in July 2013, with 47,603,002 shares outstanding. Market capitalization is ₩234.7B.

Revenue grew from ₩3.54T in 2021 to ₩7.58T in 2025, and the latest twelve months to H1 2026 show ₩8.14T. Growth was strong in 2022 (39.8%) and 2023 (46.8%), then slowed to 0.4% in 2024 and 4.0% in 2025. The data does not break revenue down by business line.

Financial analysis

These figures come from filed financial statements. Over the twelve months to H1 2026, revenue was ₩8.14T, operating income ₩151.9B and net income ₩126.6B. That is an operating margin of 1.9%, a net margin of 1.6% and a return on equity of 8.8%.

Operating income peaked at ₩356.2B in 2022 and has declined since: ₩309.8B in 2023, ₩226.5B in 2024 and ₩191.3B in 2025. Operating margin fell from 7.2% in 2022 to 4.3%, 3.1% and 2.5% in the following years. Net income was ₩82.4B in 2025. The 2022 net income of ₩488.6B (ROE 85.8%) is far above operating income that year, which suggests a one-off item, but the data does not identify it.

Liabilities are 119% of equity. Cash is ₩294.1B, borrowings are ₩586.9B, and free cash flow over the latest twelve months is negative ₩166.3B. Dividend yield is 3.0%.

Valuation

Current P/E is 1.9 and P/B is 0.2. At year-end these were 3.2 and 0.2 in 2025, 3.0 and 0.2 in 2024, 8.1 and 0.6 in 2023, and 14.6 and 2.2 in 2021 (P/B was 0.6 at year-end 2022). The stock is therefore at the low end of its own recent history. Enterprise value is ₩139.6B; EV/EBITDA is not available.

Peers: Hyundai Motor P/E 7.3 and P/B 0.5; KIA 6.0 and 0.7; KG Mobility 5.4 and 0.3; Autech P/B 0.6 (no P/E); DYP 3.3 and 0.3.

The valuation model is a 5-year discounted cash flow at a 7.4% rate, based on trailing figures to H1 2026. It gives a model estimate based on the assumptions shown of ₩78,576 per share in the base case, ₩2,163 in the bear case and ₩213,568 in the bull case, against a share price of ₩4,930. The range is extremely wide, which shows how sensitive the result is to the assumptions, particularly given negative free cash flow. It is not a target or a reason to buy or sell.

Catalysts

  • A corporate value-up plan was filed on 2026-10-22, though the data does not give its contents.
  • On 2026-10-15 the company filed a treasury share sale decision and a share cancellation decision, which bear on share count and capital allocation.
  • An exchangeable bond issue decision was filed on 2026-10-07 and amended on 2026-10-08, which could affect future share structure.
  • A convertible bond issue decision and an acquisition of shares in another company were filed on 2026-08-27.
  • Foreign ownership rose from 2.5% to 2.9% over 60 days, and foreign and institutional investors were net buyers over the last 20 days while retail investors were net sellers.

Risks

  • Operating margin has fallen for several years in a row, from 7.2% in 2022 to 1.9% over the latest twelve months.
  • Free cash flow is negative at ₩166.3B and borrowings of ₩586.9B are about twice the level of cash.
  • Convertible and exchangeable bond issues may dilute existing shareholders or add to financing obligations, with terms not shown in the data.
  • The model estimate range of ₩2,163 to ₩213,568 is so wide that it gives little precision, and the bear case is below the current price.
  • The share price is down 15.3% over one year and 7.5% over one month, and sits close to its 52-week low of ₩4,745.

Closing view

The data shows a company with very large revenue, low multiples and a market value well below book value, but also shrinking margins, negative free cash flow and a leveraged balance sheet. The low P/E and P/B may reflect these concerns, and the data does not settle which view is right. Recent filings point to active changes in capital structure, whose effects are not yet quantified. The model estimate spans a very wide range, so it is best read as a sign of uncertainty rather than a precise value.

Model estimate of fair value

Bear
₩2,163
-55%
Base
₩78,576
+1522%
Bull
₩213,568
+4308%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 7.4%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 30, 2026InitiationStart of coverage (reader request)KG Eco Solution: Thin Margins and Low Multiples, With a Wide Gap to the Model Estimate

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information